Lobbyists Rally Competitive Industry for Long Fight Ahead

Posted: 11/2001

Lobbyists Rally Competitive Industry for Long Fight Ahead
By Tara Seals and Kim Sunderland

Photos by Stewart Ash

It would be a political disaster for the current administration to allow the competitive telecom industry to fail, according to the top lobbyists representing the sector’s major trade groups.

“They can’t afford to let our industry fail during their administration,” said John D. Windhausen Jr., president of the Association for Local Telecommunications Services (ALTS), which represents facilities-based competitive carriers.

“Our companies are linked to the economy of the future,” Windhausen said. “Policymakers need to see that this industry is instrumental to the future of the economy.”

Of course, these days the competitive industry is being whacked hard by the financial markets and by proposed Bell-friendly legislation on Capitol Hill.

During the PHONE+ magazine’s sponsored fall Channel Partners Conference & Expo in Washington D.C., lobbyists met to discuss the regulatory perils before them, and what the industry must do to remain intact.

H. Russell Frisby Jr., president of the Competitive Telecommunications
Association (CompTel) says that he believes any legislation offering the Bell companies relief from rules in the Telecommunications Act of 1996 essentially will end up recreating national monopolies. With such relief, there likely would be one wireline company, one cable company, and one or two wireless firms owned by the wireline company.

“The rumble is, well, maybe we should let them do it, join with the software and equipment cartels and get the economy started,” Frisby says. “But a monopoly would mean high prices and poorer service. Every person in this room would be out of business.”

More options and opportunities, which can be provided by the competitive telecom industry, are needed to jump-start the economy, Frisby says.

If Wall Street could look favorably on the competitive industry, money that’s sitting on the sidelines probably would begin moving again, say some industry watchers. Because when Wall Street speaks, the slumping investments for competitors might turn around.

“Customer acquisitions, generating revenue from existing markets, keeping customers happy — we just need Wall Street to start valuing that,” Windhausen said.

At the same time, when regulators and lawmakers speak, Wall Street is listening. If support for the competitive industry flowed up from Capitol Hill, then investors would be more likely to open up their pocketbooks again.

One issue confronting competitors is the hotly contested Tauzin-Dingell bill (H.R. 1542). The bill aims to deregulate the Bells and allow them to sidestep certain Telecom Act provisions, gain approval for in-region long-distance more easily and provide high-speed data.

Basically, if Tauzin-Dingell were approved, a Bell company could receive exemptions to having to open up its local loop and unbundling, explains Ernest B. Kelly III, president of the Association of Communications Enterprises (ASCENT). In turn, the Bells could pull the plug on any company interconnecting with the local loop.

It’s a double whammy.

“The Bells have tried any number of different ways to avert their responsibilities, mostly unsuccessfully,” Kelly says. “So they couldn’t change the implementation and interpretation of the [Telecom Act], so now they’re trying to change the laws by saying that the ’96 act applies only to legacy networks,” he added.

All the lobbyists suggested that competitors maintain good, focused business plans and exceptional customer service.

Meanwhile, the FCC could increase fines against the Bell companies for not opening up their local markets and offer tax credits for rural broadband deployment, the lobbyists suggested.

The Links

Association for Local Telecommunications Services
Association of Communications
Enterprises ASCENT
Competitive Telecommunications Association
Federal Communications Commission

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